FACT SHEET

UNITED STATES DEPARTMENT OF AGRICULTURE

FARM SERVICE AGENCY

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August 2013

Feedstock Flexibility Program

Overview

USDA will purchase sugar 

from domestic sugarcane and 

sugar beet processors and sell 

it to bioenergy producers for 

biofuel production under the 

Feedstock Flexibility Program for Bioenergy Producers 

(FFP). The FFP was added 

under Title IX of The Food, 

Conservation, and Energy Act 

of 2008 (2008 Farm Bill) to 

help the Secretary of Agriculture avoid forfeitures of sugar 

under the sugar loan program. 

The regulations governing the 

FFP program are found at 7 

CFR Part 1435, Subpart E (78 

FR 45441, July 29, 2013). 

Sugar beet and sugarcane 

processors can receive a loan 

from the Commodity Credit 

Corporation (CCC) on their 

sugar production that can be 

fully satisfied by giving CCC 

title to their loan collateral, 

also known as a “forfeiture” 

of collateral. Thus, sugar 

producers always have the 

opportunity to receive at least 

the loan proceeds from their 

crop, which becomes a floor 

on the returns to domestic 

sugar producers.

The 2008 Farm Bill Sugar 

Program mandates that CCC 

avoid the federal costs associated with sugar loan collateral forfeitures. The Sugar 

Program minimizes forfeiture 

expenditures by limiting 

domestic supply, resulting in 

higher domestic sugar prices 

than the price support floor 

created by the sugar loan 

program. Domestic supply is 

controlled through the sugar 

marketing allotment program, 

which limits the quantity of 

sugar that domestic sugar beet 

and sugarcane processors can 

market, and by sugar Tariff 

Rate Quotas, which allow a 

certain quantity of sugar to be 

imported at a lower tariff rate, 

through the FFP and other 

authorities.

Under the FFP, if USDA is 

faced with the likelihood of 

loan forfeitures, it is required 

to purchase surplus sugar 

and sell it to bioenergy producers in order to minimize 

forfeitures. If forfeitures do 

occur, USDA can dispose of 

the inventory through sales to 

bioenergy producers or other 

disposal alternatives. 

FFP General Rules – 

Sugar Purchasers

CCC will estimate and announce by Sept. 1 the quantity 

of sugar that may be made 

available under FFP for the 

following crop year. Under 

the FFP the purchased or forfeited CCC sugar can be used 

for the production of bioenergy products, such as ethanol. 

The terms and conditions of 

any particular sugar purchase 

or sale under the FFP may 

change, and any changes in 

program administration will 

be included in the invitation 

announcing the sugar purchase or sale. 

Eligible Sugar to be 

Purchased by CCC

CCC will only purchase raw 

sugar, refined sugar, or inprocess sugar for FFP that is 

pledged as collateral under 

the CCC sugar loan program. That means that the 

sugar must be a product of the 

United States.

Eligible sugar seller

The sugar seller must be located in the United States.

Eligible sugar buyer

An eligible sugar buyer/bioenergy producer must produce 

bioenergy products, including 

fuel grade ethanol or other 

biofuels.

Competitive Procedures

CCC will generally issue tenders for bids before entering 

into contracts with any eligible sugar seller or buyer. The 

intent is to select the bid(s) 
FACT SHEET

Feedstock Flexibility Program August 2013

that represents the least cost to 

CCC of removing sugar from 

the market.

Miscellaneous

As a sugar buyer, a bioenergy 

producer must take possession 

of the sugar no more than 30 

days from the date of CCC’s 

purchase. Each bioenergy 

producer that purchases sugar 

through FFP must provide 

proof as specified by CCC 

that the sugar has been used in 

the bioenergy factory for the 

production of bioenergy. The 

producer must permit access 

for USDA to verify compli-

ance.

Call Pamela McKenzie, FSA/

USDA, telephone (202) 

260–8906 for further informa-

tion.

The U.S. Department of Agriculture 

(USDA) prohibits discrimination 

against its customers, employees, 

and applicants for employment on 

the bases of race, color, national 

origin, age, disability, sex, gender 

identity, religion, reprisal, and where 

applicable, political beliefs, marital 

status, familial or parental status, 

sexual orientation, or all or part of 

an individual’s income is derived 

from any public assistance program, 

or protected genetic information 

in employment or in any program 

or activity conducted or funded by 

the Department. (Not all prohibited 

bases will apply to all programs 

and/or employment activities.) 

Persons with disabilities, who wish 

to file a program complaint, write to 

the address below or if you require 

alternative means of communica-

tion for program information (e.g., 

Braille, large print, audiotape, etc.) 

please contact USDA’s TARGET 

Center at (202) 720-2600 (voice and 

TDD). Individuals who are deaf, 

hard of hearing, or have speech 

disabilities and wish to file either an 

EEO or program complaint, please 

contact USDA through the Federal 

Relay Service at (800) 877-8339 or 

(800) 845-6136 (in Spanish). 

If you wish to file a Civil Rights pro-

gram complaint of discrimination, 

complete the USDA Program Dis-

crimination Complaint Form, found 

online at http://www.ascr.usda.gov/

complaint_filing_cust.html, or at any 

USDA office, or call (866) 632-9992 

to request the form. You may also 

write a letter containing all of the 

information requested in the form. 

Send your completed complaint form 

or letter by mail to U.S. Department 

of Agriculture, Director, Office of 

Adjudication, 1400 Independence 

Avenue, S.W., Washington, D.C. 

20250-9410, by fax (202) 690-7442 

or email at program.intake@usda.

gov. 

USDA is an equal opportunity pro-

vider and employer.

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